Financial Crime World

Economic Crime in Indonesia: Key Findings from the 2005 Global Crime Survey

Corruption as a Victimless Economic Crime

The 2005 global crime survey by PricewaterhouseCoopers highlights that corruption is often perceived as a victimless economic crime. However, this perspective can be misleading as it can cause significant damage and negatively impact business prosperity.

  • Corruption can lead to financial losses, damage to reputation, and even bankruptcy.
  • The business community must maintain an ethical stance on corruption and resist the pressure to use bribery and corruption as means of doing business.

Indonesian Anti-Corruption Laws

Indonesian Anti-Corruption Laws include penalties of up to 20 years imprisonment for giving or promising something to a civil servant with the aim of persuading them to perform an action or not perform an action in violation of their obligation.

Recovery from Economic Crime Incidents

The survey found that:

  • Only 5% of respondents were able to recover more than 61% of the loss resulting from a serious fraud incident.
  • 86% of companies were unable to recover funds from the perpetrator of a serious fraud incident.
  • Only 27% of companies in Indonesia were insured for economic crime losses.

Reaction and Recovery

In terms of reaction and recovery, the survey found that:

  • Of the respondents who experienced a serious fraud, 24% of the time the main perpetrator was dismissed, while in 31% of cases no action was taken.
  • Companies need to ensure that evidence is collected in a legal manner and all relevant facts are considered to initiate criminal or civil action against perpetrators.

Conclusion

The survey concludes by emphasizing the importance of fraud risk management, including regular fraud risk assessments, as a key part of enterprise-wide risk management programs. It also highlights the need for mechanisms for employees and others to detect and report suspicions of fraud, and for organizations to have an investigation plan in place to respond effectively and efficiently to economic crime incidents.